Feed aggregator

Hungarian Prime Minister Viktor Orbán's controversial visit to Russia, condemned by most EU leaders as appeasement towards Moscow, aimed to ‘collect information’ about the possibility of a ceasefire, his chief foreign policy advisor told Euractiv.

The US military withdrew its personnel from Niger's Air Base 101 near the airport in the capital Niamey on Sunday (7 July), ahead of its exit from a major drone base near the desert city of Agadez in the coming weeks.

Plusieurs sources au sein du Rassemblement national (RN) ont confirmé dimanche soir (7 juillet) à Euractiv que le parti d’extrême droite devrait rejoindre le groupe des « Patriotes pour l’Europe » formé au Parlement européen par Viktor Orban et ses alliés.

By Jomo Kwame Sundaram
KUALA LUMPUR, Malaysia, Jul 8 2024 (IPS)

For some time, most multilateral financial institutions have urged developing countries to borrow commercially, but not from China. Now, borrowers are stuck in debt traps with little prospect of escape.

Jomo Kwame Sundaram

More debt, less growth since 2008
The last decade and a half has seen protracted worldwide stagnation, with some economies and people faring much worse than others.

The 2008 global financial crisis and Great Recession have recently been worsened by the Covid-19 pandemic, US Federal Reserve Bank-led interest rate hikes and escalating geopolitical economic warfare.

Following Reagan-inspired tax cuts, ostensibly to induce more private investments, budget deficits have loomed larger. Instead of enabling rapid recovery, greater fiscal austerity is now demanded, as in the 1980s.

After fiscal expansion averted the worst in 2009, unconventional monetary policies, mainly ‘quantitative easing’ (QE), took over. The European Central Bank (ECB) followed the US Fed’s QE lead for over a decade.

QE’s lower interest rates encouraged more borrowing as more credit became available and affordable. With rich nations offering less concessional finance, developing countries had little choice but to turn to markets for loans.

Spending counter-cyclically in a downturn requires government borrowing, which QE made more accessible and cheaper. The resulting borrowing surge has since returned to haunt these economies since 2022-23, when interest rates spiked.

Pushing debt
World Bank slogans, such as ‘from billions to trillions’, urged developing country governments to borrow more on market terms to meet their funding needs for the SDGs, climate and the pandemic.

With capital accounts open, many private investors have long sought ‘safety’ abroad. But when lucrative direct investment opportunities beckoned, e.g., in India, some ‘capital flight’ returned as foreign investments, typically privileged and protected by host governments and international treaties.

Easier credit availability on almost concessional terms, thanks to QE, enabled more, often innovative, financialization. Blended finance and other such innovations promised to ‘de-risk’ private investments, especially from abroad.

Despite less bank borrowing than in the 1970s, indebtedness increased with more market-based debt. However, such indebtedness did not grow the real economy much despite much private technological innovation.

Borrowing sours
The US Fed started raising interest rates from early 2022, blaming inflation on the tight labour market. As interest rates rose sharply, debt became more burdensome.

Thus, government borrowing worldwide became more constrained when more needed. Raising interest rates has dampened demand, including private and government spending for investment and consumption.

But recent economic contractions have been mainly due to supply-side disruptions. The second Cold War, the COVID-19 pandemic, and geo-political economic aggression have disrupted supply lines and logistics.

Raising interest rates dampens demand but does not address supply-side disruptions. Inappropriate policies have not helped, as such anti-inflationary measures have cut jobs, incomes, spending and demand worldwide.

Worse for some
Following the 2008 global financial crisis, successive US presidents have successfully maintained full employment. All central banks are committed to ensuring financial stability, but the US Fed also has an almost unique second mandate to maintain full employment.

Developing countries now face many more constraints on what they can do. Most are heavily indebted with little policy space for manoeuvre. With more financing from markets, the pro-cyclical bias is more pronounced.

Vulnerable developing countries believe they have little choice but to surrender to the market. Poverty in the poorest countries has not declined for almost a decade, while food security has not improved for even longer.

Worse, geopolitics has put much pressure on the Global South to spend more on the military. But most recent food price increases were due to speculation and ‘artificial’ rather than real shortages.

Poor worst off
The likelihood of distress increases with debt burdens. Debt stress has grown tremendously in the last two years, especially for developing countries heavily borrowing in major Western currencies.

Although the apparent reasons for central banks raising interest rates are rarely cited anymore, interest rates have not fallen, and funds have not flowed back to developing countries.

For at least a decade, the US has increasingly warned developing countries against borrowing from China despite its low interest rates compared to most other credit sources except Japan.

Consequently, China’s lending to developing countries, particularly in Sub-Saharan Africa, has fallen since 2016. By 2022, poorer countries had borrowed much more from commercial sources. But such private capital has since fled to the US and other Western markets offering high returns with more security.

Capital flight from developing countries, especially the poorest, followed as much less money went to the poorest developing countries via markets. With fewer funding options, the poorest countries have been the most vulnerable.

Negotiating with varied private creditors in markets, rather than via intergovernmental arrangements, has proved much more difficult. With much more private market funding, such financiers will not take instructions from governments unless compelled to do so.

Hence, little on the horizon offers any real hope of significant debt relief, let alone strong recovery and improved prospects for sustainable development in the Global South.

IPS UN Bureau

 

Follow @IPSNewsUNBureau
!function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0],p=/^http:/.test(d.location)?'http':'https';if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src=p+'://platform.twitter.com/widgets.js';fjs.parentNode.insertBefore(js,fjs);}}(document, 'script', 'twitter-wjs');   Related Articles

• Government Debt Is Symptom, Not Cause
• South Suffering Due to Powerful Nations’ Policies
• Global South Stagnating under Heavier Debt Burden
• Onerous Debt Making Poorest Poorer
• Rich Nations, IMF Deepen World Stagnation
• Open Veins of Africa Bleeding Heavily
• Inflation Phobia Hastens Recessions, Debt Crises
• 1980s’ Redux? New context, Old Threats
• China Debt Traps in the New Cold War
• Prioritise Pandemic Relief, Recovery: No Time for Debt Buybacks
• Neoliberal Finance Undermines Poor Countries’ Recovery

The French far-right party Rassemblement national (RN) is set to join the "Patriots for Europe" group formed in the European Parliament by Viktor Orban and his allies, several sources within the party and Lega confirmed to Euractvi on Sunday (July 7). 

Americas The Thor unmanned aerial system is part of the US Department of Defense’s Medium Range Reconnaissance effort, which seeks Group 2 drones weighing between 9.5 to 24.9 kilograms for the army. Thor is designed with targeting, dropping, and intelligence, surveillance, and reconnaissance capabilities for multi-domain operations. It is capable of lifting 22 pounds (10 kilograms) of cargo, can be folded, transported via backpack storage, and deployed in under two minutes. Thor can fly autonomously for up to 70 minutes with its integrated electro-optical infrared sensor enabled. Mitsubishi Electric has signed a pilot contract with Raytheon to repair transmitters used in APG-63 (V)1 F-15 fighter radars operated by the US Air Force and allied forces. Raytheon will verify Mitsubishi Electric’s repair capabilities under the pilot contract, deciding whether to contract it for such services in the future. The contract has been signed on the basis of Mitsubishi Electric’s experience producing and repairing the APG-63 (V)1s operated by the Japan Air Self-Defense Force (JASDF). Middle East & Africa According to Defense News, the US will have fully cleared out of one air base in Niger as it continues to move personnel and equipment from the African country ahead of a September […]

In a surprising turn of events, the French left-wing coalition, the New Popular Front, has overtaken Marine Le Pen’s National Rally, coming first during the second and final round of France’s snap elections on Sunday (7 July).

Hungarian Prime Minister Viktor Orbán was in Beijing on Monday (8 July) for a visit he branded as a "Peace mission 3.0" after recent trips to Moscow and Kyiv.

Having come third in the elections, Macron's party has won more MPs than predicted in the polls, and now hopes to bring together a grand coalition from the Socialists to the liberal right to form a government after the Olympic Games.

Pope Francis denounced populist politics and what he called "the dross of ideology" on Sunday (7 July), warning that democracy was not in good shape in many parts of the world.

Une certaine stabilité semble régner sur les taux de change des devises en Algérie, malgré les disparités notables entre les valeurs officielles et celles du […]

L’article Cotations des devises en Algérie : prix de l’euro à l’achat et à la vente ce 8 juillet ! est apparu en premier sur .

Deux eurodéputés du Rassemblement national (RN) ont été élus dimanche 8 juillet à l’Assemblée nationale et laisseront leur place au Parlement européen.

A Kenyan coastal region has seen a spate of murders, supposedly over witchcraft but really over land.

L’ancienne majorité était promise à la déroute, mais le camp présidentiel devrait sécuriser environ 160 sièges au sein de la nouvelle Assemblée nationale, et espère parvenir à créer une grande coalition, qui irait du Parti socialiste (PS) à la droite libérale.

L'ananas béninois ‘'pain de sucre'' est toujours exporté sur le marché européen. Ce sont les assurances du porte-parole du gouvernement béninois, Wilfried Houngbédji, lors de sa dernière sortie médiatique.

Pas de polémique. Le Bénin continue d'exporter ses ananas sur le marché européen. « Quand le président Talon arrivait en 2016, notre ananas était interdit en Europe. On ne pouvait pas exporter de l'ananas béninois là-bas parce que les normes n'étaient pas du tout respectées », a rappelé Wilfried Houngbédji. Le gouvernement, poursuit-il, sous l'égide du président de la République a fait en sorte de remettre notre ananas aux normes et depuis 2018 ou 2019 nous sommes à nouveau admis sur le territoire européen et donc sur le territoire français.
« Des Béninois, des Français et des Occidentaux viennent chercher nos ananas et l'exportent sur le marché européen », informe-t-il.

En juin, des ananas du Bénin ont été retirés des rayons de supermarchés en France. « Un des exportateurs a envoyé plusieurs cargaisons et il y a deux lots qui avaient été épinglés pour la simple raison qu'il y a un produit qu'on appelle éthéphon qui était en dose un peu supérieure à ce qui est admis sur le marché français », explique le porte-parole du gouvernement.

A en croire Wilfried Houngbédji, il y a eu défaillance au niveau des contrôles de départ au Bénin pour qu'on enregistre des livraisons non conformes aux normes. Il informe que dans les champs, les producteurs ont été formés et sensibilisés par les agents du ministère de l'agriculture à comment faire pour respecter les normes. « Si l'agent du ministère de l'agriculture n'est pas là (…) il peut vous passer à l'esprit d'administrer un produit supplémentaire alors que vous n'avez plus besoin de ça. Donc c'est possible que cela se soit passé dans un champ », a relevé Wilfried Houngbédji.

Après l'étape de champ, un laboratoire se charge d'analyser et de certifier les produits avant exportation. « On a deux hypothèses : au niveau du champ il s'est passé quelque chose et au niveau du laboratoire on devrait pouvoir identifier. La certitude que nous avons, c'est qu'il y a un dysfonctionnement au niveau de ce laboratoire. Des gens qui sont préposés à faire un certain travail sur la chaîne du contrôle ne l'ont pas fait », a affirmé Wilfried Houngbédji.

Le gouvernement béninois n'a pas tardé à agir. Le ministre de l'Agriculture a relevé le directeur général de l'Agence béninoise de sécurité sanitaire des aliments (ABSSA) de ses fonctions pour faute grave. « S'il y a des sanctions à administrer, les personnes responsables vont répondre de leurs actes et subir les sanctions prévues par les textes », a souligné le porte-parole du gouvernement.
Il rassure que l'ananas béninois continue d'aller sur le marché européen et sur le marché français. « Il n'y a pas de polémique (…) », a ajouté Wilfried Houngbédji.

Akpédjé Ayosso

The leftist bloc Nouveau Front populaire (NFP) won an unexpected victory in the second round of French parliamentary elections but the loose coalition of left-wing parties could be short-lived as a broad new alliance in the centre will be needed to form a new parliamentary majority. 

Le Nouveau Front populaire (NFP) a obtenu une victoire inespérée au second tour des élections législatives, mais la coalition des partis de gauche pourrait déjà être menacée, alors que des alliances au centre seront nécessaires pour former une nouvelle majorité, comme au Parlement européen.

Bei der Frankreich-Wahl liegt die Linke überraschend vorn, der Premier will gehen. Muss Präsident Macron die Macht abgeben? Seine Lage ist wohl weniger dramatisch, als dies auf den ersten Blick erscheint. Hier die möglichen Szenarien.

Die zweite Runde der französischen Parlamentswahlen hat viele politische Experten ratlos zurückgelassen. Der überwältigende Sieg des Rassemblement National blieb aus. Stattdessen trumpft das Linksbündnis gross auf.